Answered by: Alimah Siddiqa al-Farsiyyah
Question:
Assalamu Alaikum Wa Rahmatullah
Someone asked another to book him a flight on a plane and rent a hotel for him. The salesman says he will buy this package on my behalf and sell back to me for a profit but on credit terms.
The salesman is not working as a commission agent for the airlines etc.
He goes online buys a $100 ticket on the customer’s name and then says I sell you this package for $150 credit.
This is nothing but a loan on interest.
Answer:
بسم الله الرحمن الرحيم
In the name of Allah, the Most Gracious, the Most Merciful.
Assalamualaikum Wa Rahmatullahi Wa Barakaatuh
A credit contract with a pre-agreed and guaranteed interest repayment is an interest bearing contract, which is haram.[[1]] If the salesman purchased a ticket and sold it for more on credit with the condition that if the purchaser delays in paying the amount on time, he will be charged interest, then this is prohibited.
Imam Abubakr Al-Jassas, in his famous work, Ahkamul Qur’an, has explained Riba (interest) as the following: “The Riba which was known and practised by the Arabs (in the time of ignorance) was that they used to advance loan in the form of dirham or dinar for a certain period with an agreed increase in the amount of the principal advanced.”[[2]] The scenario you have mentioned resembles this.
Under the secular capitalist system, loans are purely commercial transactions meant to yield a fixed income to the lenders. Islam, on the other hand, does not recognize loans as income-generating transactions. They are meant only for those lenders who do not intend to earn a worldly return through them.[[3]]
To conclude, the scenario you have mentioned is prohibited unless the element of interest is removed from it.
Only Allāh Ta’ālā knows best
Written by Aalimah Siddiqa al-Farsiyyah
Checked and approved by Mufti Mohammed Tosir Miah
Dārul Iftā Birmingham
[1] Contemporary Fatawa, Mufti Taqi ‘Uthmani, pg.217, Idara e Islamiat
[2] The Historic Judgment on Interest, Mufti Taqi ‘Uthmani, pg.32-33, Maktabah Ma’ariful Qur’an
[3] The Historic Judgment on Interest, Mufti Taqi ‘Uthmani, pg.98, Maktabah Ma’ariful Qur’an